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While some luxury brands have openly expressed their reservations about selling on Amazon — largely due to counterfeit listings — a growing number of brands are exploring the opportunity to sell there.
That's according to Christine Beauchamp, the president of Amazon's fashion business, who shared her thoughts about luxury brands during the company's first all-hands meeting of the year, held late last month and reviewed by Business Insider.
At the meeting, an employee asked Beauchamp how Amazon planned to build customer trust through Luxury Stores, its new upscale fashion and beauty site, when high-end brands have historically been "reluctant" to sell on Amazon's broader marketplace. The employee didn't specifically ask about counterfeits, but a number of luxury brands have previously cited fake products and unauthorized sellers as their primary reasons for avoiding selling on Amazon.
Beauchamp, who rarely speaks in public, said the launch of Luxury Stores has helped draw more upscale brands to Amazon. In fact, she said Amazon decided to launch Luxury Stores precisely because of the demand it saw from both the customers and brands. Since rolling out Luxury Stores in September, more than 50 fashion and beauty brands have asked about selling on Amazon, she added.
"Several luxury brands privately inbounded us to ask what a luxury experience from Amazon might look like," Beauchamp said during the meeting. "So far, the launch has led to strong customer interests and new engagement, with over 50 global brands who have inbounded both to our Luxury Stores team and to our core Amazon fashion team."
Beauchamp's response shows Amazon's image among luxury brands may be slowly improving, after the company has heavily invested in its fashion business and anti-counterfeiting efforts. On Tuesday, Amazon announced a new joint operation with the US government's National Intellectual Property Rights Coordination Center to block counterfeit goods from entering the country.
Luxury Stores, which started with exclusive products from fashion brand Oscar de la Renta, is an invite-only site built within Amazon's marketplace. Brands have control over their inventory, selection, and pricing, while getting access to custom features that help them personalize content. They also get to use Amazon's fulfillment network and existing technology across its mobile and advertising services.
In an email to Business Insider, Amazon's spokesperson confirmed Beauchamp's comments, adding more brands are expected to join Luxury Stores "in the coming weeks and seasons," as both emerging and well-known fashion brands showed interest since its launch.Mixed results
Counterfeit products have long been a major source of concern for luxury brands looking to sell on Amazon. Bernard Arnaut, the CEO of the LVMH Moët Hennessy – Louis Vuitton group, said earlier this year that he would "resist" selling on Amazon because he doesn't want his company to be associated with the counterfeits sold on Amazon's marketplace. Swatch Group, the owner of luxury watch brands like Omega and Blancpain, ditched Amazon's marketplace after it couldn't get a commitment from Amazon to clean up counterfeits and unauthorized sellers, according to the Wall Street Journal.
Amazon's spokesperson said in a statement to Business Insider that the company "strictly prohibits the sale of counterfeit products" and that it invested over $500 million in 2019 alone in protective measures and anti-counterfeiting programs.
Luxury Stores is part of Amazon's on-going effort to expand its fashion business. In recent years, Amazon's fashion team launched new shopping services, like Prime Wardrobe, which allows you to try the item before buying, and Personal Shopper, a service that gives curated recommendations. In June, it held Amazon's first-ever fashion sales event called the Big Style Sale.
Earlier this year, Amazon also promoted Beauchamp to CEO Jeff Bezos's "S-team," a group of about two dozen top company leaders that work closely together on key business decisions. It was a big stamp of approval for Beauchamp, who joined Amazon in 2017, after having held executive positions at Victoria's Secret and Ralph Lauren, among others.
"This year so far, we've established hundreds of new relationships and added hundreds of thousands of products from nationally recognized brands, emerging designers, and direct to consumer digitally native brands," Beauchamp said during the all-hands meeting.
Amazon doesn't break out its sales from the fashion category. But Wells Fargo previously forecast Amazon to become the largest US apparel retailer by 2019, with over $30 billion in sales that year. Most of those sales, however, are expected to come from commodity products, like shirts and underwear, instead of the more higher-end items.
Not every project has enjoyed long-lasting success. For example, a new storefront called "Common Threads: Vogue x Amazon Fashion'' shut down just five months after launching in October. The initiative, made in partnership with Vogue and the Council of Fashion Designers of America, was designed to help connect shoppers with small and medium-sized US fashion businesses affected by the COVID-19 pandemic.
Amazon's spokesperson said the Common Thread project was created as an "immediate, time-bound response" to the pandemic, and that Amazon's fashion team is now "encouraging brands of all sizes who are interested in selling in Amazon's store to contact the Amazon team directly."
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